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The DXY Setting Up for Breakout or Breakdown Ahead of Non-farm?

INDEX:DXY   U.S. Dollar Index
The U.S. dollar index             ( DXY             ) is in a precarious place ahead of the highly anticipated non-farms payroll print tomorrow.

Technically, the DXY             is budding up against descending trend resistance created when the greenback was able to carve out a multi-year high of 100.39 in March. After a series of lower-lows and lower-highs, traders have been able to create a slight comeback on the ongoing rhetoric of a few Fed presidents.

Supportive comments from Dennis Lockhart (Fed-Atlanta) and James Bullard (Fed-St. Louis) about the potential of a September rate hike are giving traders something to trade; but, if the Fed fails to deliver anything meaningful after month-dropping - if not an outright boost in the Fed funds rate - the dollar could suffer greatly.

Near-term price resistance is seen at 98.10 but has yet been able to close above the major trend line with positive-DMI suggesting weakness in price action.

Employment data has been a key factor because it is likely an indicator of whether or not Fed Chair Janet Yellen will offer a stronger case for a rate hike. Up until the recent FOMC minutes, Yellen has remained rather dovish and has relentlessly commenting on the slack in the labor force.

If non-farm payrolls print larger than expected job additions, the dollar will bid higher to 98.61/65 while a close above the descending trend will confirm the near-term trends strength. If momentum follows, a bid to 99.42 is possible.

However, less than or expected non-farms print could send the dollar lower. Support can be found at 97.1 and 96.53 (corresponding with the 50-day EMA ).

This week's ADP July non-farm employment change came in at 185,000. Economists were looking for 215,000. Last month's print was revised lower from 237,000 to 229,000.

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Wondering if there is a bigger political question on this with the amount of debt purchased since 2008 and the interest hike that would have to be made on all this debt bought by the treasury? Your thoughts? Thanks Pauly
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